The Drosophila developmental gene, engrailed, encodes a sequence-specific DNA binding activity. Using deletion constructs expressed as fusion proteins in E. coli, we localized this activity to the conserved homeodomain (HD). The binding site consensus, TCAATTAAAT, is found in clusters in the engrailed regulatory region. Weak binding of the En HD to one copy of a synthetic consensus is enhanced by adjacent copies. The distantly related HD encoded by fushi tarazu binds to the same sites as the En HD, but differs in its preference for related sites. Both HDs bind a second type of sequence, a repeat of TAA. The similarity in sequence specificity of En and Ftz HDs suggests that, within families of DNA binding proteins, close relatives will exhibit similar specificities. Competition among related regulatory proteins might govern which protein occupies a given binding site and consequently determine the ultimate effect of cis-acting regulatory sites.